Currency Trades for the Next Hurricanes
Irene may be history, but the hurricane season is still in full swing. Here's how to use currencies to ride the storms.
Those of us contending with the aftermath might not feel it, but Hurricane Irene is now past tense.
Other storms are in the offing, though, and you can make money from the mess if you trade on the right ones - the ones that look likely to go through the Gulf and disrupt oil production.
"The key to the hurricane trade," says Andrew Busch, global currency and public policy strategist for BMO Capital, "isn't like when the storm is in the Gulf but when it is off Africa and you start to see it build. That's when you have to get the trade on. It's all about anticipation."
If you see a storm building that looks like it will head toward the Gulf's oil rigs, try buying currencies of oil-exporting countries like Canada and Norway. They should benefit form any storm-related reduction in oil supply, which would lift oil prices, Busch says.
"Those two currencies, Canada and Norway, buy those and sell others," Busch told CNBC's Melissa Lee.
You can watch the discussion in the video above, starting at 1:23.
Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm and repeats on Saturdays at 7pm.
Learn more: The essential vocabulary for currency trading is on Key Currency Terms. Top currency strategies are broken down for you in Currency Class.
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